Diversified Energy Expands US Oil Asset Base with Maverick Acquisition

Diversified Energy (LSE: DEC; NYSE: DEC) has announced a significant move to bolster its US oil and gas portfolio, agreeing to acquire Maverick Natural Resources, a portfolio company of EIG, for approximately $1.275 billion. The acquisition, expected to close in the first half of 2025, will add immediate scale, increase liquids production, and create a combined company with long-term free cash flow generation, superior unit cash margins, and a compelling sustainability profile.



The acquisition combines two complementary asset packages, pairing Diversified's high-quality, low-decline, capital-efficient production with Maverick's liquids-rich assets. This combination is expected to result in a 95% increase in revenue and a 55% rise in free cash flow, alongside improved margins and cost synergies. The combined company will have an enterprise value of approximately $3.8 billion and operate across five distinct operating regions, with a combined production base of approximately ~1,200 MMcfe/d (~200 Mboe/d).



The acquisition provides Diversified with new organic growth opportunities through established joint venture partnerships across the combined portfolio of vast undeveloped acreage in multiple high-returning basins. A portion of the acquired assets directly offsets Diversified's core Western Anadarko position with active development in the Cherokee Play, and provides a new Permian asset base with multiple zones in the Northern Delaware Basin. This expansion into the Permian Basin allows Diversified to diversify its production portfolio and gain exposure to one of the most active and high-potential oil and gas basins in the United States.



The acquisition is expected to strengthen Diversified's financial position through disciplined debt reduction, a sustainable fixed dividend policy, and strategic share repurchases. The combined company's expanded asset base and commodity diversification will enable it to generate substantial free cash flow, delivering strong, consistent shareholder value creation.

Rusty Hutson, Jr., CEO of Diversified, commented on the acquisition: "This acquisition expands our unique and highly focused energy production company with a complementary portfolio of attractive, high-quality assets. We have a proven track record of unlocking value from acquisitions while maintaining our commitment to sustainability leadership, and this acquisition provides us with great assets and employees that complement this strategy."

The acquisition of Maverick's Permian Basin assets positions Diversified Energy as a significant player in the U.S. oil and gas industry, with increased production, reserves, and access to high-potential development opportunities. This acquisition also enhances Diversified Energy's competitive position and financial strength, allowing it to better compete with larger peers in the industry.

In conclusion, Diversified Energy's acquisition of Maverick Natural Resources is a strategic move that expands its US oil and gas asset base, increases liquids production, and enhances its financial position. This acquisition positions Diversified Energy as a significant player in the U.S. oil and gas industry and sets the stage for continued growth and value creation for shareholders.